What Would Happen If We Redistribute Wealth Equally To Everyone?

Posted by Fitz Villafuerte under Mindsetting on July 31, 2015

Have you ever thought about what would happen if all the wealth in the world is redistributed equally to everyone?

It’s an interesting scenario, which I tried to imagine a few days ago.

To arrive at my conclusion, I made some assumptions.

One of which is that everyone agreed to the redistribution, so there are no protests to the idea.

Second, the redistribution will include all assets, which means cash, properties, business equity, and investments will all be divided equally to everyone.

Lastly, I assumed that after the redistribution, life will go on peacefully despite the change in the financial status of everyone.

So what do you think will happen?

wealth-equality

Redistribution of Wealth

I believe that after a few years, everything will eventually go back to how it was before the redistribution of wealth.

This means, most of those who were poor will end up poor again. While those who used to be rich, will eventually gain back the wealth they had.

Why? Because when it comes to building wealth, it’s the financial education, and its proper execution that really matters.

So after the redistribution, the previously poor people will probably commit money mistakes and acquire liabilities because they don’t know how to manage their finances.

Meanwhile, those who used to be self-made millionaires will do what they know they do best – work hard, leverage other people’s money, accumulate assets, and create multiple sources of income.

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The Case of Russia

If you think that sounds far-fetched, then consider what happened to Russia.

During the early 1990s, when Soviet Union collapsed, the successor government of Russia could not manage the huge and inefficient state enterprise sector that it inherited from the Soviet economy.

So they decided to do a large-scale privatization of state-owned assets. Or in simpler terms, Russia sold a large number of government-owned properties to the public.

To do this, the Russian government printed out vouchers, each corresponding to a share in the national wealth, and were distributed equally among the population, including minors.

These vouchers could be exchanged for shares in the enterprises to be privatized, which meant that everyone will be on equal footing when it comes to acquiring these assets.

But because most people were not well-informed about the nature of the program or were very poor, they were quick to sell their vouchers for money, unprepared or unwilling to invest.

Most vouchers, and hence, most shares wound up being acquired by the enterprises of wealthy citizens.

No Accident

Wealth does not happen by accident. It is the result of financial knowledge that is applied with proper discipline over many years.

This means that if you want to become rich, then you need two things – financial education and financial execution. You need to learn, and then apply those learnings.

You’re now doing the first step by reading this blog. Browse around and read more. But don’t forget to apply what you’ve learned into your life.

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5 Responses to “What Would Happen If We Redistribute Wealth Equally To Everyone?”


  1. Maribeth EM says:

    It’s okay if labor will also be distributed equally. Life is designed to be a cause and effect of our actions. Some people are wealthy and some are not, perhaps because they have not tried harder.

    Like for me, I can say that financially I am in a good position now. But it took me almost ten years to be where I am now. Hard work and perseverance are the key. I studied hard to gain good skills, I worked hard to improve myself and now it’s paying off. Some people just want everything easy that they forget it will take 5 years for a coconut tree to bear fruits.

    So if you say redistribute wealth equally to be fair? Then that is the most unfair thing to do. Life is not designed to be fair anyway 🙂

    So work hard, pray hard and everything will be given to you.

  2. I agree with your opinions. Things will just come back to before, because we have different levels of education and ability to do finance.
    Maribeth EM has a great comment. Life is that unfair. This imagination sounds wrong and impossible in the first place. We should just wish for world peace haha :).
    Thanks for posting though!

  3. raulgumangan says:

    there is a different notion on working hard today , it’s working smart….

  4. Ray says:

    I agree with this. The “Take from the rich and give to the poor” is actually “take form those who worked to earn it and give to those who didn’t.”

    This is Matthew 25:29 (The end of the Parable of Talents). Those who use well what they have get more and grow richer, and those who don’t lose what little they have and grow poorer. Over time, the rich keep using their blessings (their wisdom and the wealth they earned) and grow richer, those who waste what they have grow poorer (think of all those people abusing credit cards and getting buried in debt).

  5. King Kano says:

    Lots of good comments, but the real problem is, the, “MORON EFFECT…” I am from the USA, and time and time again, people here win the Lottery, and the money is gone…How about in the PHI? Did you ever work overseas, and have every relative in the world, ask you for money? Chester’s pig farm, auntie Lucie’s, sari sari store, Jo’s Jo’s tooth, and Betty’s diabetes, and the new car and flat screen TV, yet they still live in poverty? Me, I have no problem, telling my relatives, to get lost, earn their own, because I earned mine..I ate Top Ramon, potatoes, had an old beat up car, didn’t date…Do you remember the joke, If you had three wishes, what would you ask for? Me, I would ask for 1,000 more wishes….Wealth, if redistributed, in 90% of the cases, would go right back into the hands, of the dirty hands, because prices go up, taxes go up, supply and demand goes out of balance, on short time table…There is nothing worse in an economy for a huge surge in buying, then everyone has everything, but no one money, AGAIN, so they sell everything at discounted prices…What we need is a fair, minimum wage and fair Social security system, (SSS) because those are the ones who pay our salary…I am willing to pay more in taxes, if it would go into the hands of the poor for QUALITY FOOD, MEDICAL, AND Education, and I said, quality, not just free…But the rich, if you not noticed in the Philippines, and now in America, quickly raised the tuition for education, for teaching costs, and salaries, to prevent the every day Pinoy, from going to school…Why? TO PREVENT JOB COMPETITION WITH THE RICH KIDS WHO DON’T STUDY I have noticed, the smartest people in the Philippines, are the poor and lower middle class…My kids, are super smart, wise, and would scare you, if you talked to them, at ages 4 and 19 months…So, wealth redistribution, is useless, but fair wages, is good for the economy with a fair tax base to pay for services to those in need..In the USA, they cry about higher minimum wages, but when the minimum wage was strong and where it should be, the small businessman, and corporate America, would grow and grow, and no one cried foul..Now bankruptcy is a way of life in America…Hope this helps

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